What is the test for a binding agreement?

But additionally there was no controversy that the agreement correctly sets out the arrangements between the parties, although there is now objection to the validity of the indemnity provision in the agreement, and the agreement was accepted and acted upon for many years by both parties. In my view there can be no question that both parties were bound by the terms. That the agreement was accepted and acted upon by both parties for a number of years as evidencing the arrangements, is obviously an important element in considering whether a binding agreement has been established. I consider that the agreement has been “strictly and conclusively established.” See City of Montreal v. College Sainte Marie 1920 CanLII 380 (UK JCPC), [1921] 1 A.C. 288, Duff J. (later C.J.C.) at page 291.